Correlation Between Kaiser Aluminum and Amgen
Can any of the company-specific risk be diversified away by investing in both Kaiser Aluminum and Amgen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kaiser Aluminum and Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaiser Aluminum and Amgen Inc, you can compare the effects of market volatilities on Kaiser Aluminum and Amgen and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kaiser Aluminum with a short position of Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaiser Aluminum and Amgen.
Diversification Opportunities for Kaiser Aluminum and Amgen
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kaiser and Amgen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kaiser Aluminum and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc and Kaiser Aluminum is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kaiser Aluminum are associated (or correlated) with Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Kaiser Aluminum i.e., Kaiser Aluminum and Amgen go up and down completely randomly.
Pair Corralation between Kaiser Aluminum and Amgen
Given the investment horizon of 90 days Kaiser Aluminum is expected to under-perform the Amgen. In addition to that, Kaiser Aluminum is 1.2 times more volatile than Amgen Inc. It trades about -0.13 of its total potential returns per unit of risk. Amgen Inc is currently generating about 0.13 per unit of volatility. If you would invest 27,587 in Amgen Inc on December 2, 2024 and sell it today you would earn a total of 3,219 from holding Amgen Inc or generate 11.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kaiser Aluminum vs. Amgen Inc
Performance |
Timeline |
Kaiser Aluminum |
Amgen Inc |
Kaiser Aluminum and Amgen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kaiser Aluminum and Amgen
The main advantage of trading using opposite Kaiser Aluminum and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaiser Aluminum position performs unexpectedly, Amgen can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amgen will offset losses from the drop in Amgen's long position.Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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